Stronger Yen and Kiwi

June 10, 2014

The dollar fell 0.1% relative to the Australian dolar, 0.2% against the yen and 0.3% versus the the kiwi but shows overnight gains of 0.3% relative to the euro and Swiss franc and 0.1% vis-a-vis the loonie and sterling.

Ten-year Japanese JGB and British gilt yields are unchanged, while the 10-year German bund has dipped a basis point.

Share prices in the Pacific Rim fell by 0.9% in Japan, 0.3% in Singapore and 0.2% in New Zealand but rose 1.3% in Indonesia and China, 1.1% in South Korea, 0.9% in Hong Kong, 0.7% in Taiwan and 0.1% in Australia. In European markets, stocks fell 0.5% in the U.K. but firmed 0.9% in Switzerland, 0.3% in Italy, 0.2% in Germany and 0.1% in France.

The price of WTI oil increased 0.3% to $104.69 per barrel. The price of Comex gold edged 0.1% lower to $1,252.50 per ounce.

Chinese consumer prices ticked 0.1% higher in May and accelerated in year-over-year terms to a four-month high of 2.5% from 1.8% in April. A 12-month decline in producer prices was the smallest since December.

In contrast to faster bank lending growth reported Monday, Japanese M2 money growth slowed to 3.3% in May from 3.5% in April and 4.0% in the first quarter. Broad liquidity grew 2.7% in the year to May, down from 3.2% on-year in April and 3.9% in 1Q.

Japan’s tertiary index, a monthly gauge of service-sector activity, plunged 5.4% in April following a 1.7% 1Q-over-4Q13 gain. In the year to May, machine tool orders (+24.1%) rose only half as much as the 48.7% gain recorded in April.

The National Bank of Australia’s business confidence index stayed at +7 in May and had such a reading for the third time in four months. Australia’s business conditions index slid a point to a score of minus 1, lowest this year. Australian home loans were flat in April, while job ads in May dived 5.6% on month, more than reversing a revised 1.9% increase in April.

British industrial production climbed 0.4% in April and to a 12-month 3.0% rise, the most since 2011. Factory output also improved 0.4% on month and accelerated in on-year terms to an advance of 4.4% from 3.6% in the year to March. The British Retail Consortium reported a pronounced slowdown in same-store sales to 0.5% in May. Such was elevated in April to 5.4% because of the Easter holiday.

French industrial production edged up 0.3% in April but posted a larger 12-month 2.0% rate of decline. Italian industrial production went up 0.7% on month and 1.6% on year. Revised Italian GDP data for 1Q (down 0.1% from 4Q13 and -0.5% on year) matched the preliminary finding.

The Bank of France’s index of French business sentiment suffered another setback, dropping to 97 in May after a 2-point rise in April. The index is four points lower on net than a half-year ago. The central bank is projecting GDP growth of just 0.2% this quarter, although that would be an improvement from zero growth last quarter.

The Swiss jobless rate remained at 3.2% in May.

Greek industrial production rebounded 0.9% on month in April but posted another on-year decline, this time of 2.2%. Greek consumer prices fell by 2.0% on year and 0.8% on month in May.

In other European price data, Norway’s CPI posted a 1.8% on-year increase in May, matching the result in April and slightly under 2.0% in March. Norwegian producer prices fell 0.9% in May but rose 0.7% on year. Dutch consumer prices fell 0.3% on month and slowed to a 0.8% 12-month rate of increase. Danish consumer price inflation decelerated to 0.5% last month from 0.7% in April. Cypriot consumer prices were 0.1% lower than a year earlier in May.

Several U.S. states are holding primary elections today. The National Federation of Independent Business reported a rise in small business sentiment to a reading in May of 96.6 from 95.2 in April. The Labor Department will be releasing the JOLTS monthly data of job separations and hirings later today. Weekly chain store sales figures arrive as well.

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